Discuss the Disclosure Requirements for Long Term Investments Including Accounting

question 15

Essay

Discuss the disclosure requirements for long term investments including accounting policies and non-controlling interest (NCI).
Companies should disclose their policies with regard to long-term investments. The general presumptions regarding the factors that establish a control investment and noted that these presumptions could be overcome in certain situations.
IFRS 3 Business Combinations requires that a reporting entity describe the basis for its assessment and any significant assumptions or judgments when the reporting entity has concluded that:

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Definitions:

Manufacturing Arrangement

A type of franchise in which the franchisor provides the franchisee with a formula or necessary ingredient to manufacture a product.

Franchisor

A company that grants the license to an individual or company allowing them to operate a business under the franchisor's brand and business model.

Necessary Ingredient

An essential component or element required for a particular process, action, or outcome to occur.

Franchise Agreement

A contract whereby a company (the franchisor) grants permission (a license) to another entity (the franchisee) to use the franchisor’s name, trademark, or copyright in the operation of a business and associated sale of goods in return for payment.